How Rate Rises will Hit BTL Investors

The Bank of England believes Britain’s booming BTL market poses a threat to Britain’s economic recovery. This makes an interest-rate rise more likely. But what will the impact be on BTL investors? The Telegraph kindly, or unkindly if you’re in the firing line, outlines the potential impact of varying rate rises on BTL investors. A rise to 2.5pc would, according to The Telegraph, leave 13pc of landlords with insufficient rental income to pay off their mortgages.  While a rise of 1.5pc would leave one in twenty landlords having basic affordability issues.  A base rate rise of 1pc, probably the most likely scenario in the short term, would have a less damaging impact with 0.38 pc of landlords being unable to cover their mortgage.  To see how you would fare, visit the link below:


B of E Set for New Powers over BTL Mortgage Market


As if the spectre of interest rate rises wasn’t bad enough, it looks like the Bank of England has finally been granted its wish to gain greater powers to control the BTL mortgage market. The Chancellor, George Osbourne, told a Treasury Committee this week the following: “The Governor of the bank and the FPC have asked for additional powers over buy-to-let mortgages… We have granted those powers so that they have that tool as well.” We won’t engage in too much speculation until a formal announcement gets made but it sounds ominous. Given the concern about the indebtedness of some people with BTL mortgages, it may well lead to a reduction in loan to value amounts or number of properties which can be bought with BTL loans.


Filthy Rich Find London to their Liking

It wouldn’t be a property news round-up without one story highlighting the shenanigans in England’s capital city. As recently reported in our round-up, London sauntered past Manhattan and Sydney to become the number one destination for the world’s super rich.


And Land Registry data, seen by The Standard, confirms suspicions that the majority of property is being snapped up by off-shore companies who provide more favourable tax circumstances as well as protecting purchasers’ identities.  A whopping £100bn has been spent on London property since 2008 by overseas companies. Two third of these purchases came from four British tax havens. Find out more by following the link below:-


Right to Buy Extends to Social Housing

When Margaret Thatcher introduced right to buy ownership of council houses in 1980, it was hailed as a home ownership revolution. It let council tenants buy their homes at discounted prices, and then, having sold them on two decades later, no doubt retire early as newly-minted property millionaire. If they’d bought in somewhere like central London, of course. The spirit of right to buy, though, is still alive and well, with the Conservatives wishing to extend it to tenants in social housing.  Opposition, though, has made them tone down their efforts a tad.


Housing associations must voluntarily opt in to the scheme rather than be forced to sell to interested tenants.  PM David Cameron claims the majority of Housing Associations support the measure. Oh no, they don’t, cried The Guardian, predictably, pointing out that the recent vote among the associations resulted in only 55% of members coming out in support.  However, buried in the bottom paragraphs of the Guardian piece is the admission that those who do support it control a rather sizeable 93% of the UK’s housing association market.


Are some Landlords getting away with it?

The Residential Landlords Association (RLA) found out that that only 2006 landlords have been prosecuted for housing offences in the last eight years despite reports claiming that hundreds of thousands of tenanted houses have habitation issues.  Earlier this year, the Citizens Advice Bureau (CAB) claimed in a report that £5.6bn was being taken by landlords whose homes didn’t meet legal standards. While homelessness charity Shelter in a separate report alleged that more than a quarter of a million people were living under duress from landlords or in poor habitation. Despite such claims, proportionally few prosecutions are being made, a consequence, says the RLA of ‘patchy’ enforcement of regulations by local councils. For the lowdown on those landlords of the rogue variety, see below


Red Heroes Shelter Homeless

No surprises about the week’s top scoring story on social media. It was the heart-warming tale of two former Man United footballers letting homeless squatters stay in their projected boutique hotel conversion in Manchester until the end of winter.

Being Manchester, where they still say with good reason: “never cast a clout (winter clothes) until May is out”, this could potentially be for a long time. But apparently, February is the designated date for their departure.  Ryan Giggs and Gary Neville, who are working on a number of investment ventures together, bought the grade II listed Stock Exchange on Norfolk Street in the city centre for £1.5m, and will be transforming the building into a 35 bedroom luxury hotel for people who presumably own a number of homes.